Lordstown Motors' CEO and CFO Resign After Board Concludes Pre-Orders Were Exaggerated

LORDSTOWN CEO STEVE BURNS, SHOWN HERE LAST YEAR WITH A PROTOTYPE ENDURANCE PICKUP, HAS RESIGNED. NEW BOARD CHAIR ANGELA STRAND WILL LEAD THE COMPANY WHILE IT SEARCHES FOR A NEW CEO. IMAGE SOURCE: LORDSTOWN MOTORS.

Embattled electric-pickup start-up Lordstown Motors (NASDAQ:RIDE) said today that its CEO Steve Burns and CFO Julio Rodriguez have resigned, after a report by the company's independent directors concluded that some of Lordstown's statements about its pre-orders were inaccurate.

A committee formed by Lordstown's independent directors examined allegations made by short-seller Hindenburg Research in March. The report concluded that while several of Hindenburg's allegations were without merit, the firm's most explosive allegations -- that Lordstown had exaggerated the number of pre-orders for its pickup, and that some of those pre-orders may have been made by small companies that don't operate fleets -- were valid.

The news is the latest in a series of developments that have shaken auto investors' confidence in the start-up, which is still hoping to begin deliveries of its electric truck to commercial-fleet customers this fall.

Lordstown warned in a regulatory filing last week that it might not have enough cash to stay in business for another year. The warning, a so-called "going concern" notice inserted by the company's auditors, came as a surprise to some investors who had thought the company had ample cash to ramp up production of its Endurance pickup truck.

Burns is shown with a silver prototype Lordstown Endurance, an electric pickup truck.

That in turn followed the reveal of Ford Motor Company's (NYSE:F) electric F-150 Lightning in May. Compared to the Endurance, the Lightning offers a more extensive set of features tailored to fleet customers, at a lower price; that, plus Ford's already-dominant position in commercial-fleet sales in North America, makes it difficult to see a path for the Endurance to acquire meaningful market share.

Lordstown said that Angela Strand, an independent director and former Workhorse Group (NASDAQ:WKHS) vice president, will lead the company on an interim basis while it searches for a new CEO.

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